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Isko Steps Out As Premium Denim Ingredient Brand

For years, Isko was content to operate as a business-to-business player, a well-known global manufacturer of functional fabrics to which high-end designer denim brands could turn to make their jeans stretchier or stronger or otherwise more appealing.

Recently, however, the Turkish company has been taking a page from IntelIntel and Gore-Tex and other so-called ingredient brands that have become household names in their own right, in a quest to garner consumer attention and preference in-store. It’s a timely move, given consumers’ heightened interest in value, brand purpose and sourcing.

It’s also timely given the lagging momentum in a once-hot market. Indeed, premium denim has seen some fraying in recent years. As NPD Group Chief Industry Analyst Marshal Cohen writes in a recent blog post, the total denim market is a $17 billion business, up 5 percent vs. the same time period a year ago. But the premium denim market—denim priced at $75 and above, which accounts for 7 percent of all denim sales, is down 18% compared to last year, according to NPD. Sales are down all over, including on the west coast, a once-hot mecca for luxury denim. With growth rates down and consumers feeling maxed out with jeans purchases, opportunity lies in new, alluring technologies, according to Cohen: “Wake up denim makers! It’s time to give the consumers what they want: a reason to buy and to make that backside look even better.”

Isko is the textile division of Sanko Group, a conglomerate that is one of the five largest in Turkey, and it covers more than 35% of the global premium denim market. “One jean out of three is made out of this denim,” said Head of Worldwide Marketing Marco Lucietti. The company, founded in 1983, ships to 60 countries, and its “wearable technology” is in 2,500 products. Eighty-five percent of its denim innovations are patented. Certain jeans brands, like Diesel, with which the company has an existing co-branding project for its JOGG jeans, can use certain of its technologies on an exclusive basis, for example, for two seasons. Isko even claims creation of the jegging—a stretchy denim legging. “We own the trademark,” Lucietti said.

Lucietti is bullish on Isko’s opportunity. Fatih Konukoglu, CEO of Sanko Textiles-Isko denim division, hired him four years ago and started building the global marketing team. “We’ve always been an innovation company; now we’re becoming an innovation and marketing company,” Lucietti said, as it seeks to grow the business. The company’s ingredient-brand strategy began in 2010, but it now is working to build greater awareness among consumers. The company launched an ad campaign to the denim community and has experimented with displaying the Isko brand with hang tags on products at the point of sale.

In addition to Diesel, the company has projects with brands such as British brand MiH, 3×1, J. Crew and Esprit as they seek to create higher-value and sometimes higher-priced jeans. In fact, Isko doesn’t want to be in all denim, but rather, “stick to premium denim,” Lucietti said. Primary U.S. target markets, meanwhile, are New York and Los Angeles, said Kutay Saritosun, who oversees North American marketing.

But successful ingredient branding is no easy task, writes Kevin Keller, E.B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College, in his Strategic Brand Management textbook. It must accomplish four tasks, he writes: 1. Consumers must first perceive that the ingredient matters to the performance and success of the end product. Ideally, this intrinsic value is visible or easily experienced. 2. Consumers must then be convinced that not all ingredient brands are the same and that the ingredient is superior. Ideally, the ingredient would have an innovation or some other substantial advantage over existing alternatives. 3. A distinctive symbol or logo must be designed to clearly signal to consumers that the host product contains the ingredient. Ideally, the symbol or logo would function essentially as a “seal” and would be simple and versatile—it could appear virtually anywhere—and credibly communicate quality and confidence to consumers. 4. Finally, a coordinated push and pull program must be put into place such that consumers understand the importance and advantages of the branded ingredient. Often this will include consumer advertising and promotions and, sometimes in collaboration with manufacturers, retail merchandising and promotion programs. As part of the push strategy, some communication efforts may also need to be devoted to gaining the cooperation and support of manufacturers or other channel members.

“We need to be consistent to build an ingredient brand,” Lucietti acknowledges. “We are moving our marketing and communications strategy toward being the thought leader of our category,” including with involvement in industry-educational program i-Skool. “[Our goal] is not to speak about ourselves, but to have the industry speaking about Isko.”

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